Furthermore, it was alleged that Binance.US and Binance weren’t so independent, with the SEC saying Zaho and Binance “secretly controlled” Binance.US operations behind the scenes. customers” trading on the original platform. 2018, Binance’s COO told a compliance officer at the company, “we are operating as a fking unlicensed securities exchange in the USA bro.”īut even after launching Binance.US, the SEC alleges that Binance was determined to keep “high-value U.S. In the lead up to launching Binance.US, company execs appeared to recognize they were already walking on precarious legal ground by operating in the United States. customers would be restricted from using the original Binance platform, and that Binance and Binance.US were independent from each other. Back in 2019, Binance (which is based overseas) launched a U.S. laws, which other regulators have also expressed concern about (the Commodity Futures Trading Commission sued Binance back in March over the same issue). In its new lawsuit, the SEC also targeted Binance’s alleged attempts to skirt U.S. A lot of people could lose a lot of money.” So I worry about the potential for it to go down. It’s hard to put a finger on where operating, what they’re doing.” He added: “We just went through the collapse, and that was a regulated bank, at least there was some review process. Chris Van Hollen told Rolling Stone, “Clearly CZ has been lurking in the shadows. Despite his stature, he’s largely been able to keep a low profile - but that’s changed significantly in recent months, especially after the high-profile collapse of Binance’s former main rival, FTX, and the indictment of its co-founder Sam Bankman-Fried (who’s pleaded not guilty to numerous fraud and campaign finance charges).Īs Maryland Sen. is being primed for the job.)Īs Rolling Stone recently reported, Zhou is arguably the dominant player in crypto, and among the 60 richest people in the world. (It appears likely, though it’s not confirmed, that Richard Teng - who was tapped to oversee Binance’s regional markets outside the U.S. News of the SEC lawsuit broke just a few hours after reports emerged speculating on a possible succession plan at Binance, with Zhou reportedly looking to step back from the exchange, while also decreasing his ownership. surreptitiously commingled billions of dollars of investor money, sending it to another third party, Merit Peak Limited - which Zhao also owned. One employee reportedly responded, “woah.” 2021 message from the Sales Director at BAM Trading (a U.S.-based Binance affiliate) to the company’s CEOs and other employees, which listed 20 Binance.US account numbers: “fyi these are ALL sigma chain,” the Sales Director wrote. users that was supposedly independent from Binance proper. Binance allegedly diverted some of those funds to a separate entity Zhao owned, Sigma Chain, which the SEC said was “engaged in manipulative trading” to artificially boost the trading volume on Binance.US - a platform established in 2019 for U.S. The Securities and Exchange Commission ramped up the pressure on Binance, bringing 13 charges against the world’s largest cryptocurrency exchange and its founder/CEO Changpeng “CZ” Zhao.Īccusing Binance of misleading customers and misusing funds, the SEC said the company was able to control customer assets and move them around as it pleased.
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